§ 113 Credit Insurance Coverage Limits

• •Credit insurance protects businesses from losses when customers don't pay their bills.
• •It also covers losses from future promises that might not be kept.
• •If the insurance fits the definition of financial guaranty insurance, it cannot be called credit insurance.

A small shop lets customers buy now and pay later, and the shop buys credit insurance to protect itself if those customers don't pay.

The shop's policy is credit insurance because it covers loss when customers fail to pay. But if the policy is really a financial guaranty (like promising to pay a loan), the shop can't label it credit insurance under this law.